I’m a writer and digital editor. Previously, I served as senior digital editor at the Los Angeles Times. I also headed mobile technology and emerging platforms for latimes.com. Formerly, I’ve been on staff at Entrepreneur Magazine, and have written for various national publications. I love art, tech, and science - and especially places where all three of those things clash, mesh, or merge.

A Startup To Democratize The Stock Market

The New York Stock Exchange was first established in 1792 by 24 stock brokers standing under a tree. What began as a simple agreement has evolved into an intricate financial system.

Financial markets reflect global hopes, fears, failures, and big wins. Markets are actually personal, but the way we share stock tips and information is anything but connective.

Today not everyone trades — partially because the markets seem to have a closed-door policy, lending themselves to those with brokers and inside trading tips. An exclusive process in which a limited number of people are privy to limited information. There’s no place on the Internet currently where anyone can discuss the stock market in real time.

Stockr wants to change that. It’s a social network specifically for watching stocks and talking with other investors.

Vinny Jindal, CEO of Stockr, said, “Right now trading is a team sport. And it’s a very exclusive team sport. Professionals have all kinds of informational resources. They have systems like Bloomberg. And more importantly they have a physical social network. I’ve rarely seen somebody make an investment decision in a vacuum all on their own, just with some data. They ask other people whose opinion they respect, people they’ve come to meet.”

“On the Internet, there’s very limited social technology to find someone, to ask something, to hear what that person has said, and then hit the follow button. That doesn’t exist anywhere online for finance.”

Jindal, a biologist who left science to work as a biotech equity research analyst, was a principal at Boston Millennia Partners and a managing director at ThinkEquity Partners. He also worked for Lehman Brothers, Wedbush Morgan Securities, and Origin Capital Management.

Spending nearly a decade in the field, he gained an intricate understanding of how stocks moved and how information on what to invest in was digested and distributed. His learnings inspired him and his partners to create a platform for breaking down the walls of financial information sharing.

Founded in June 2010, Stockr will launch out of private beta this July.

Essentially Bloomberg for the masses, it allows users to watch the markets and discuss them all day — at work, at home, on the site in private chats (like IM), or on public-facing message boards (like a Facebook wall). It provides an easy way to look at how your portfolio has performed on a daily basis. It almost makes the stock market more friendly.

Whereas Yahoo! Finance gives a quick, static snap shot with little way to directly communicate with other (often anonymous) users and message boards are relics from the 1990s, the Stockr platform is an in-depth, real-time, more sophisticated deep dive.

The site includes:

Investor Profile Pages. Your own page that lists who you are and what stocks you watch.

Company Pages. A full picture of the company and how the stock performed over the course of time.

Watch List. Lists out the stocks you’re currently watching.

Pulse. What everyone on the site is saying in real time about stocks that you currently follow.

Stockr’s algorithm connects you with companies and other investors you might be interested in, based on your trading interests. If you like technology stocks, their algorithm seeks out the most relevant people on the network to talk about technology stocks with you.

“At the same time, you’re able to track not only the prices of the individual companies in real time, but you’re able to see all the things happening around those companies right now. So, if an article is written on the web about a company you follow, we pick that up and push that to you in real time,” said Tim Symington, Stockr co-founder.

What about those who might spread false information?

Jindal explained, “Social networks where participants use their real identity tend to either reduce spamming and dishonesty, or to hold the person spreading falsehoods accountable. Unlike the existing, anonymous message boards, we force the use of real identity so people will have to stand by their words. And if you don’t like what someone is saying or don’t believe that they’re being honest, you simply don’t have to follow them.”

Registration is currently through Facebook. Eventually, the start-up plans to offer sign-up through LinkedIn and Google Plus.

Perhaps this sort of democratization has been a long time coming. With the Occupy movement as a national backdrop and the disenfranchised feeling a greater chasm between those that have choices and those that do not, this time is ripe for tools that champion greater open access and communication. Tools that might actually change how business is done.

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Picking stocks is difficult. Why would it be any easier to pick the correct person(s) to listen to or shadow? Perhaps, someone is an industry expert on Stockr and had a series of good calls, but will that person always be correct? Not likely. So do your odds improve for picking the right stocks at the right time? More importantly, do your odds of having a profitable investment or portfolio edge above 50%? The data says no. If we assume that active managers are the smart people with timely information and have insightful colleagues to confer their idea with so they don’t make investment decision in a vacuum, reports (like S&P’s SPIVA) have show that over the long-term active management does not beat indexing. These are the smart people! Why would an individual investor do any better? Will the average person be better off with a social network for investors (i.e., will they make more money at the end of the day). While financial social networks could be interesting to socialize on (so is gambling which has similar if not better odds depending on what segment of the active management world your compare to), individual investors would be better off with a diversified portfolio of index funds. Is this really what the millions of individual investors need?

Actually, jacobandersen — Yahoo! is not real-time at all. It provides static finance snapshots. But that is all. Twitter is not a platform for stocks, it’s a social media platform; if stock information is shared, it’s only part of many other larger conversations.

Not sure how STOCKR democratizes the stock market. I guess it facilitates the ability of shareowners to converse with each other and that is a first step… but there would be a long way to go to democratize anything. Democracy is about control, the rules of the game being more fair and balanced.